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Reason-based choice correspondences

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  • Lombardi, Michele

Abstract

A reason-based choice correspondence rationalizes choice behaviour in terms of a two-stage choice procedure. Given a feasible set S, the individual eliminates from it all of the dominated alternatives according to her fixed (not necessarily complete) strict preference relation, in the first step. In the second step, first she constructs for each maximal alternative identified in the first step its lower contour set (i.e. the set of alternatives which are dominated by it in S), and then she eliminates from the maximal set all of those alternatives so that the following justification holds: there exists another maximal alternative whose lower contour set strictly contains that of another maximal alternative. This procedural model captures the basic idea behind the experimental finding known as "attraction effect". We study the rationalizability of reason-based choice correspondences axiomatically. We relate our choice-consistency conditions to standard consistency proprieties. Our characterization result offers testable restrictions on this 'choice anomaly' for large (but finite) set of alternatives.

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Bibliographic Info

Article provided by Elsevier in its journal Mathematical Social Sciences.

Volume (Year): 57 (2009)
Issue (Month): 1 (January)
Pages: 58-66

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Handle: RePEc:eee:matsoc:v:57:y:2009:i:1:p:58-66

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Web page: http://www.elsevier.com/locate/inca/505565

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Keywords: Incomplete preferences Reason-based choice Revealed preferences;

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References

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  1. Paola Manzini & Marco Mariotti, 2007. "Sequentially Rationalizable Choice," American Economic Review, American Economic Association, vol. 97(5), pages 1824-1839, December.
  2. Ehlers, Lars & Sprumont, Yves, 2008. "Weakened WARP and top-cycle choice rules," Journal of Mathematical Economics, Elsevier, vol. 44(1), pages 87-94, January.
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  4. Sen, Amartya, 1993. "Internal Consistency of Choice," Econometrica, Econometric Society, vol. 61(3), pages 495-521, May.
  5. Michele Lombardi, 2006. "Uncovered Set Choice Rule," Working Papers 563, Queen Mary, University of London, School of Economics and Finance.
  6. Ran Spiegler, 2002. "Equilibrium in Justifiable Strategies: A Model of Reason-based Choice in Extensive-form Games," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 691-706.
  7. Paola Manzini & Marco Mariotti, 2006. "Two-stage Boundedly Rational Choice Procedures: Theory and Experimental Evidence," Working Papers 561, Queen Mary, University of London, School of Economics and Finance.
  8. Amartya Sen, 1997. "Maximization and the Act of Choice," Econometrica, Econometric Society, vol. 65(4), pages 745-780, July.
  9. Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, University of Chicago Press, vol. 16(2), pages 158-74, September.
  10. J�rg Rieskamp & Jerome R. Busemeyer & Barbara A. Mellers, 2006. "Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 631-661, September.
  11. Eliaz, Kfir & Ok, Efe A., 2006. "Indifference or indecisiveness? Choice-theoretic foundations of incomplete preferences," Games and Economic Behavior, Elsevier, vol. 56(1), pages 61-86, July.
  12. Ariel Rubinstein & Yuval Salant, 2006. "Two Comments on the Principle of Revealed Preference," Levine's Bibliography 321307000000000272, UCLA Department of Economics.
  13. Sen, Amartya K, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Wiley Blackwell, vol. 38(115), pages 307-17, July.
  14. Sen, Amartya K, 1977. "Social Choice Theory: A Re-examination," Econometrica, Econometric Society, vol. 45(1), pages 53-89, January.
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  16. Amos Tversky & Itamar Simonson, 1993. "Context-Dependent Preferences," Management Science, INFORMS, vol. 39(10), pages 1179-1189, October.
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Cited by:
  1. de Clippel, Geoffroy & Eliaz, Kfir, 2012. "Reason-based choice: a bargaining rationale for the attraction and compromise effects," Theoretical Economics, Econometric Society, vol. 7(1), January.

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